Feds Put $249M Toward Port MacKenzie Railroad Extension
An aerial view shows the one-mile rail loop at Port MacKenzie, which offers space for a 110-car train to offload at the port.
Photo Credit: Matanuska-Susitna Borough
To complete a half-built rail extension to Port MacKenzie, the Federal Railroad Administration (FRA) awarded the Alaska Railroad Corporation $249 million from the Consolidated Rail Infrastructure and Safety Improvements program. The funding will support completion of 32 miles of rail from the main line near Houston to the Matanuska-Susitna Borough’s (MSB) deepwater port at Point MacKenzie, across Knik Arm from Anchorage.
Landmark Investment
US Secretary of Transportation Sean P. Duffy presented the funding award to officials of the state-owned railroad. “Alaska is America’s natural resource powerhouse, but the state needs strong infrastructure to get those resources from point A to point B safely, reliably, and efficiently,” he says. “This landmark investment will generate an economic boom for the region, unleash American energy dominance, and enhance our national security.”
The rail project began in 2006, branching from a T-shaped intersection just south of Little Susitna River in Houston, but work stalled in 2016 during the state’s economic recession. The right-of-way fades into the woods across the street from the Point MacKenzie Correctional Farm.
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Twenty-five miles of the 32-mile rail bed have been built, and six of seven bridges are in place, but the rail bed needs ballast rock, railroad ties, steel track, and fiber laid along it, along with finishing the last seven miles of the extension and five additional miles of siding and terminal track, adding a communications tower, telecom lines, operational support facilities at the terminal, and a bridge over a roadway.
Completing the project is estimated to cost $311 million in total. In keeping with Consolidated Rail Infrastructure and Safety Improvements grant program requirements, the 20 percent local match of $62 million will be met through in-kind contributions from the MSB as well as cash contributions from Alaska Railroad and the Alaska Industrial Development and Export Authority.
Roughly $184 million in state appropriations have been previously awarded to the MSB to secure the right-of-way, address permitting, and complete most of the civil embankment and bridge work.
Earlier this year, the Alaska Gasline Development Corporation (AGDC) revived the rail extension, integrating the port’s fortunes with the multibillion-dollar energy project. AGDC partnered with two Australian companies in creating Alaska Infrastructure Partners, a public-private partnership aimed at finally completing the project. The Alaska Railroad, Alaska Department of Transportation and Public Facilities, Alaska Industrial Development and Export Authority, and the MSB are stakeholders in the project.
Macquarie Capital, a division of Macquarie Group that is focused on financing development and infrastructure projects, and global rail developer Martinus are working toward finishing the predevelopment process. Alaska Infrastructure Partners hopes to have the project shovel-ready by 2027.
In August, FRA Administrator David Fink joined Alaska Railroad officials on an aerial tour of the Port MacKenzie right-of-way, viewing the extensive embankment work already completed and the port district’s potential for future industrial development.
“It’s no surprise that we at the Alaska Railroad are big believers in the importance of transportation infrastructure,” says Alaska Railroad Corporation President and CEO Bill O’Leary. “It’s our belief that the Port MacKenzie Rail Extension will unlock new opportunities for Alaska’s resource development, energy security, and military resiliency.”
A map shows the current status of the Port MacKenzie Rail Extension. More than 50 percent complete before construction was suspended a decade ago, the project is being analyzed for completion.
Photo Credit: Matanuska-Susitna Borough
Mat-Su officials have for years touted the port rail extension as a tool that could make mines in the Interior more feasible, providing a way for mining companies to bring their commodities to tidewater, store them on site, and ship them when it makes sense to do so. AGDC sees Port MacKenzie as a place to land 42-inch pipe, equipment, modules, and other construction materials for a North Slope gasline.
The rail extension got a boost in April, when $34 million earmarked for Port MacKenzie was included among Alaska’s $115.4 million share of federal grants from the competitive Port Infrastructure Development Program. The grant will help pay for a 110-acre staging and laydown area, the one-mile rail loop, electric utility expansion, and barge dock improvements.